Immigration and firm news

NPR Story Highlights Role of Private Prisons Behind Arizona’s SB1070

An NPR story yesterday, Prison Economies Help Drive Ariz. Immigration Law, highlights the role of the private prison business in the development of Arizona’s anti-immigrant bill, SB 1070, portions of which are currently being litigated in the federal court. Oral argument in the case is scheduled for Monday, November 1, 2010 as described in an earlier post, “Arizona Immigration Cases Set for Oral Argument.”

Immigration practitioners have known for years about the rapid growth of the private prison business around the country. Two of the leading companies are The Geo Group Inc. and Corrections Corporation of America. Cornell Corporation recently merged with Geo Goup, and there are others. Here in Washington, for example, the Tacoma based Northwest Detention Center (NWDC) serves as the primary facility housing immigrants picked up for deportation throughout the northwest states. Persons with questionable status arriving at land, sea and airports are also brought to the NWDC. The Immigration and Nationality Act specifies the types of immigrants subject to mandatory detention without possibility of bond or release, including certain types of criminals, terrorism suspects and some applicants for asylum. Individuals not subject to mandatory detention who are entitled to relief from an Immigration Judge and are deemed not a flight risk are eventually released with or without supervision and posting of a bond. Individuals can spend days, weeks, months or years in detention, especially when cases are on appeal, travel documents cannot be obtained, or there is no country willing to accept the individual. Did your time and paid your fine? Not so if you get transferred from criminal jail or prison to immigration detention which could be in a county, state or federal facility or a privately run facility. A person with immigration issues, including some U.S. citizens, can be incarcerated long after completing a criminal sentence.

NWDC was recently expanded to house 1575 inmates in anticipation of increased enforcement activities by Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP). Run by The GEO Group, the NWDC is a stark white, antiseptic looking facility, complete with full service medical center staffed 24/7 by the United States Division of Immigration Health Services (USDIHS). GEO Group provides the security, physical infrastructure, meals and “recreation”, while ICE handles all aspects of the detention and removal process. GEO Group builds or manages several types of correctional and mental health facilities throughout the U.S., U.K., Canada, S. Africa and Australia. Its 2009 Annual Report makes for an interesting read as do its various contracts with ICE that show how the government pays for guaranteed minimum rates per filled bed. A May 2010 ICE report shows an average occupancy rate of 1232 per month.

The NWDC also houses an Immigration Court with several active judges and periodic roving judges to hear bond and removal cases. According to an October 2009 ICE report, “Immigration Detention Overview and Recommendations“, nationwide “ICE operates the largest detention and supervised release program in the country. A total of 378,582 aliens from 221 countries were in custody or supervised by ICE in FY 2008; activities in 2009 remain at a similar level. On September 1, 2009, ICE had 31,075 aliens in detention at more than 300 facilities throughout the United States and territories, with an additional 19,169 aliens in Alternative to Detention programs. As of September 1 [2009], 66 percent were subject to mandatory detention and 51 percent were felons, of which, 11 percent had committed violent crimes. The majority of the population is characterized as low custody, or having a low propensity for violence.” ICE characterizes its facilities as “jails and prisons to confine pre-trial and sentenced felons.” In this report, ICE states “these standards impose more restrictions and carry more costs than are necessary to effectively manage the majority of the detained population.” ICE and its contractors have in fact been criticized by the ACLU, Human Rights Watch and other organizations for poor quality standards and mistreatment of inmates. In the last year, ICE has been subject to revised detention standards and review. See ICE Detention Policies.

The NPR story highlights the relationships between Corrections Corporation of America, lobbyists and Arizona legislators, among others. By following the money, one can understand at least one reason why Congress has yet to pass immigration reform legislation that goes beyond throwing more money at border enforcement. A “secure border” is a moving target, especially for politicians who want to see a “secure border’, however defined, as a trigger before passing other immigration reforms. There is probably no way to measure or ever have a “secure border” for a variety of factors. In an earlier post, Gone Fishin’ Got Deported, record-setting numbers of people deported by the Obama Administration was mentioned. More enforcement activity means more arrests and more bed space needed. There are big dollars to be made from enforcement-only policies by defense contractors who provide the various equipment, drones, sensors and technologies to monitor the border; by the software vendors to collect and massage all the data; and by prison builders, just to name a few impacted industries. (One would think private lawyers stand to gain, too, except for one important fact: the majority of immigrant detainees cannot afford a lawyer. Since the Immigration Courts are civil in nature, there is no constitutional right to government appointed counsel for indigent immigrants, as is the case for accused defendants in Criminal Court. In civil Immigration Court, there is only a right to counsel. That means counsel one can afford or no counsel at all. According to the Immigration Court (Executive Office of Immigration Review) FY2009 Statistical Year Book, 114,087(40%) of 290,233 immigrants in court had counsel while 176,146 (60%) lacked representation.)

Private prisons play a big part in the criminal as well as immigration systems. Many jurisdictions have outsourced or privatized prison operations because governments can no longer afford to build their own prisons. Typically, the private prisons charge by the head or bed. They also provide the security, food, laundry and other day to day services of a prison while law enforcement agencies take care of detention matters as they pertain to the legal system. However, many local government agencies realize that the cost to incarcerate individuals, even if outsourced, still costs a lot of money, especially to house and care for people convicted of the most minor offenses. Thus, we now see more debate about whether to legalize simple possession of marijuana, for example. Additionally, more local governments are moving to increase the number of inmates entitled to early release because of the high cost of incarceration and overcrowding.

Meanwhile, those pesky .01% CD rates look rather dismal compared to private prison stocks where, despite steep drops in stock prices in 2008, the leading companies in the business are experiencing better than CD rates in terms of revenues and share value. Geo Group trades as “GEO” and Corrections Corporation of America trades as “CXW”, with both traded on the NYSE. While stock prices for both companies were hit at the start of the recession, a look at their annual reports show increasing revenues and profits while at the same time a wariness for lower government revenues and spending, which is why the Arizona law is so appealing to these companies along with increased federal border enforcement.

The Wall Street Journal, Forbes and all recently ran some interesting articles about the private prison business as investment vehicles. A year ago, the Wall Street Journal reported in “Private Prisons Have a Lock on the Business”, how prison companies were hurting in the recession but noted they were already on the rebound. In a March 18, 2010 article, “Strapped States Are Bullish For Private Prisons“, Forbes reported that California was spending more on correctional facility guards with high salaries and benefits pursuant to a strong union contract, than on education. At the end of 2008 there were 1.5 million people in prisons, up 375% from 2000, which was more than the overall population increase. Cash strapped governments are looking at private prisons because they pay lower private security guard level wages, build prisons cheaper and can run them more cost effectively. Corrections Corporation of America benefits big time from this type of outsourcing.

Finally, a May 11, 2010 article in Bloomberg News, ““Corrections Corp. Shows Crime Pays as States Turn Jails Private”” highlights the fact that the six Arizona facilities operated by Corrections Corporation of America account for $130 million in direct wages for various types of jobs needed at the facilities with an economic impact of $435 million. Accordingly, many cities like to have private prisons in their back yards because of job creation and other civic contributions made by the prison companies. According to the article, Corrections Corporation of America expects a 7% growth in price-per-share earnings due to high recidivism rates, high incarceration rates before the recession, and because the U.S. incarcerates 2.3 million people, higher than any country in the world (and greater than Russia or Rwanda).

The Yuma Sun reports that Arizona legislators, prison officials and others reject the NPR report and deny that SB 1070 was enacted to benefit private prisons. For further information see Corrections Corporation of America annual reports and political contribution reports.